What's on Pharma's Licensing Wish List?

Asset licensing, mergers, and acquisitions have become an integral pipeline expansion strategy for Pharma. The realization over the past two decades that productivity of internal R&D alone is unsustainable coincides with an increase in discovery collaborations, the in-licensing of early, preclinical, and clinical stage drug candidates, and the acquisition of innovative biotech companies. Concurrently, early partnering can provide many small biotech or pharmaceutical companies with validation and much needed capital for expanding R&D efforts in other areas, enabling diversification of their pipelines, and mitigating risk. Alternatively, acquisition of a biotech by Pharma is an ideal exit strategy for many small companies’ initial investors.

What is Pharma searching for?

Stage of asset development, therapeutic area, and asset differentiation are all important factors for gaining the attention of Pharma. Many Pharma companies provide specific web pages that detail their BD interests precisely, while others offer downloadable pdf brochures that publicly disclose their therapeutic area partnering interests.

We assembled a list of 64 pharma companies with market capitalizations of greater than $10B USD and that provide partnering web pages or pdf’s on their websites (Table 1), offered here as a resource. The information provided by Pharmas can indicate either broad descriptions of diseases of interest or more precise details of target indications, modalities, stages of development, and even specific pathways that are considered in scope. We have compiled this information and have provided links to each company’s partnering and “therapeutic areas of interest” webpages or their downloadable content and have listed each company’s stated partnering interests as of 07/25/2021.

Which therapeutic areas have the highest probability of attracting attention?

In order to answer this question, we standardized the areas of partnering interest (Table 2) according to those used by a majority of companies or, when there was no commonly used specification, we selected a suitable grouping. Using these standardized groupings, companies indicated 1 – 11 areas of interest, with a mean of 4.9 and a median of 5.0. The most popular areas of partnering interest listed by the 64 Pharma companies were Oncology (67%), Neuroscience (55%), and Immunology (55%), followed by Infectious diseases (45%), Endocrine/Metabolic (41%), Cardiovascular (38%), and Rare/Genetic (27%) (Figure 1).

The greater proportion of companies interested in oncology, immunology, and neuroscience suggests that a biotech company may have a higher probability of attracting the attention of Pharma if its drug development programs target these therapeutic areas. However, while Rare/Genetic diseases are of interest to only 27% of Pharma companies in the filtered list, orphan status protections for these indications can provide additional incentives that often prove to be very attractive to Pharma.

Partnering guidance

Whether or not your company is developing a therapeutic for a ‘hot’ indication or drug target, it is crucial to be prepared in advance of reaching out to potential partners. The entire partnering process for a pharmaceutical asset can take over a year to complete, depending on a number of factors such as the type of molecule and disease indication, how advanced the program is in development, what volume of data has to be considered, how competitive the space is, and how complex the deal terms are. Alacrita has considerable experience in supporting companies with partnering and can provide assistance across the entire partnering process.

To ensure your asset is ready for partnering, we recommend the following initial work plan related to materials preparation and partner screening:

• • Build a virtual data room
  • Mock due diligence and gap analysis
  • Prepare non-confidential (NC) and confidential pitch decks
  • Identify and prioritize prospective partners for outreach

Alacrita can assist you with these steps, and our network of expert associates ensures we have the scientific and business expertise on hand to highlight the strengths of your asset and express its value. If you are already in discussions with potential partners, we can provide you with a deal comparables analysis, sales forecast and rNPV asset valuation, and/or transactional support to ensure that deal terms are fair. Alternatively, if your company is in a position to in-license an asset, our team of asset scouting experts can help you source and evaluate assets that meet your search criteria and enable you to diversify your pipeline.

Table 1. Pharma Partnering Interests

Table 2. Standardized pharma partnering interests

*Miscellaneous includes hospital, generics, internal medicine, orthopedics, medical devices, Chinese traditional medicine

Figure 1. Percentage of companies expressing interest in standardized therapeutic area.

Our BD experience

With deep experience on both the buy and sell-side, we work with our clients to ensure that partnership, licensing and investment decisions are taken with confidence, with clear alignment between transaction price and asset value. Click here for more information on our Business Development services.